Struggling Sprint Nextel to eliminate 8,000 jobs

Struggling Sprint Nextel to eliminate 8,000 jobs

The company’s layoff announcement comes a month after AT&T Inc. announced it was cutting its work force by 4 percent, or 12,000 jobs, to deal with the effects of the recession and the continued erosion of its traditional wireline business. However, AT&T’s wireless arm has been gaining subscribers, as have Verizon Wireless and T-Mobile USA.

Sprint Nextel has had some bright spots. It recently announced a new $50 per month unlimited voice and data plan under its Boost prepaid brand, which doesn’t require customers to be tied to contracts. Analysts expect it to attract many people who can’t qualify for or don’t want to sign two-year contracts.

Also, Sprint will soon be the exclusive seller of the Palm Pre smart phone, a touch-screen device expected to rival the iPhone. The Pre is set to debut in the second half of this year.

Sprint spokesman James Fisher said the company hasn’t determined how the newest layoffs will be divided between divisions or geographic locations, including suburban Kansas City, where it is the area’s largest private employer.

But he said the company will likely avoid significant reductions in its customer service and network quality divisions, where Sprint has tried to improve in recent years.

One executive-level casualty is Kathy Walker, the company’s chief information and network officer, who is leaving as of March 31.

Jeff Kagan, an Atlanta-based wireless analyst, said in a report that while Sprint’s cost-cutting efforts are notable, they can’t save the company on their own. He discounted the effect of the economy, since Verizon Wireless and AT&T have continued to do well.